CPA ACCA
43 Points
Posted on 25 September 2026
Clear answers to both parts.
On the cash gift: money received by the daughter from her father is fully exempt, with no upper limit. A father is a "relative" under Section 56(2)(x) of the 1961 Act, now Section 92(2) of the Income-tax Act 2025, so the 80 lakh is not taxed in her hands. The tax event sits with the father: selling a 25-year-old property gives him a long-term capital gain. Since he bought before 23 July 2024, he can compare 12.5% without indexation against 20% with indexation and pay whichever is lower. Keep a simple gift deed on record and move the money by bank transfer so the source is documented if her return is ever questioned.
On clubbing: income the daughter later earns by investing the gifted money is taxed in her hands, not the father's. Clubbing under Section 64 (now Section 96 of the 2025 Act) covers the spouse, minor children and son's wife - an adult daughter is not on that list.
On gifting the property itself instead: that works too. A gift of immovable property must be made through a registered gift deed; an unregistered transfer deed does not pass title (Section 123, Transfer of Property Act). Stamp duty is payable on registration, though most states give a concession for gifts to close family. A gift is not regarded as a transfer for capital gains (Section 47(iii), now Section 70 of the 2025 Act), so no capital gains tax arises at the time of gifting. When the daughter eventually sells, she pays the tax then, and she inherits the father's cost and holding period (Section 49, now Section 73), so the gain stays long-term.
Either way, one thing stays constant: if the father sells first, he must report and pay the capital gains on that sale in his own return, regardless of what he does with the proceeds.